In what would be a key enabler in the Solar PV market. Solar supporters are applauding the decision of the Delhi government to introduce a net metering system that will reward solar producers on a monthly basis.

The Delhi government will soon introduce a net metering incentive program to encourage solar roofttop projects, the Times of India reported on Sunday.

Currently, a capital subsidy program exists in the territory that includes a rebate of a fixed sum for installations of solar water heaters. The new solar policy will be a production-based subsidy on units of energy saved by using solar power.

The Delhi environment department has said the new program will be implemented after the Delhi Electricity Regulatory Commission (DERC) notifies net metering guidelines.

“Our policy moves away from the current method of giving capital subsidies,” Delhi Environment Secretary Sanjeev Kumar told the Times of India. “The highlight of the policy will be production-based subsidy where customers will be reimbursed based on the units of energy saved. This we hope will motivate customers to invest in solar rooftop projects and solar water heaters and also to maintain them.”

The new net metering guidelines will be sent to the Delhi executive cabinet for approval after they are finalized.

According to the newspaper, Delhi’s solar heater subsidy failed to attract sufficient users. “If the subsidy is generation-based and customers are reimbursed every month for it, they will maintain their systems,” a government t official told the Times of India.

Solar proponents welcomed the move. “We have supported a production-based subsidy policy all along,” Abhishek Prata of Greenpeace India told the newspaper. “It is better because it keeps the customer engaged and motivated to maintain a solar generation system. An upfront payment of subsidy like in capital subsidy is not as effective.”

The country’s Central Electricity Regulatory Commission has prepared guidelines on net metering based on systems in Germany and the United States, which will serve as a template for state government programs.